ITT Tech students to get $4 billion in federal loan forgiveness: What borrowers should know
Any student who borrowed federal money to take classes at ITT Technical Institute – a large for-profit college that closed in 2016 following government sanctions – will see their debts erased.
The relief, about $4 billion in total, will benefit about 208,000 borrowers who attended the college from January 2005 through its closure in September 2016.
Education Secretary Miguel Cardona said the college misled students about its academic programs “in order to profit off federal student loan programs, with no regard for the hardship this would cause.”
“It is time for student borrowers to stop shouldering the burden from ITT’s years of lies and false promises,” Cardona said.
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Why are ITT Tech students getting debt relief?
The Education Department can erase the debt of students who prove they were taken advantage of by their colleges. Borrowers usually have to file for this relief individually through the borrower defense rule.
The federal government previously found ITT Tech misled students about their ability to find a job or transfer their credits to a different institution, according to a news release. Before Tuesday's announcement, the agency had already forgiven $2 billion in student loan debt of about 130,000 students who had attended the college.
ITT Tech closed in September 2016 after the government barred it from accepting new students who rely on federal aid. The ITT Tech loan discharge bears similarity to the debt cancellation of students who attended Corinthian Colleges. In that case, the federal government erased about $6 billion in student debt for roughly 560,000 borrowers.
What do borrowers need to do to get relief?
Nothing. Borrowers who are eligible for relief will see their debts discharged automatically, including those who hadn't applied for forgiveness.
Is this widespread student loan forgiveness?
No. This relief is focused only on students who had attended ITT Tech. President Joe Biden has said he’ll announce a decision on wider student debt relief at the end of the month. In total, the federal government under Biden has canceled about $32 billion for 1.6 million borrowers.
The action comes as the government has paused payments on federal student loans for the past 2½ years. Interest rates have also been set at zero percent, and collections agencies have stopped their attempts to recoup debts.
That pause, however, is slated to end this month. Biden has yet to say whether he'll extend the moratorium, though he and former President Donald Trump both extended the pause multiple times.
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This article originally appeared on USA TODAY: Student loan forgiveness at ITT Tech wipes away $4B in student debt
